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Buried lede: All those very valuable privately-owned parking spaces weren't even being assessed for anything close to their fair share of property tax. If you

by raldi 9y ago

Buried lede: All those very valuable privately-owned parking spaces weren't even being assessed for anything close to their fair share of property tax. If you owned just one parking space on this street, how much do you think you could rent it out for on Craigslist? This land has 120 parking spaces. And it was being assessed at $14 a year in property tax -- not just the parking spaces, but all of the common property.

muzz 9y ago
Likely due to state law, ie Prop 13
- raldi 9y ago
  Indeed.
- gman83 9y ago
  Good podcast about Prop 13 from Malcolm Gladwell: http://revisionisthistory.com/episodes/11-a-good-walk-spoiled http://revisionisthistory.com/episodes/11-a-good-walk-spoile...
stouset 9y ago
Presumably, this is also why they want to reverse the sale rather than buy it back from the new owners for — realistically — next to nothing. Change in ownership means reassessment for the purpose of property taxes. Even though the homes in this neighborhood have undoubtedly been bought and sold repeatedly, they formed a legal entity that's held the common area in perpetuity with the side benefit of never having to have this land's value reassessed and property taxes increased. Makes me wonder if you could perform legal gymnastics to have a home in SF owned by a trust or other legal entity, then sell ownership of that legal entity to avoid property taxes being increased during a future sale.
- raldi 9y ago
  Yep: "Nevertheless, buyers of commercial property have found a way to avoid this reassessment. Instead of buying the property, they buy the legal entity that owns the property. Under rules set by the Board of Equalization, a change in ownership of such an entity doesn't trigger a new assessment of its properties unless more than 50% of the entity is acquired by a single person or business." "[Michael] Dell agreed to buy the entity that owns the Fairmont Miramar for $200 million in 2006. But after the deal was struck, Dell rewrote the contract, bringing in his wife and two investment advisors as partners. Because none of them held more than a 49% interest in the entity that owned the hotel, the hotel kept its assessment from 1999" http://www.latimes.com/opinion/opinion-la/la-ol-michael-dell-proposition-13-change-20140514-story.html http://www.latimes.com/opinion/opinion-la/la-ol-michael-dell...

by raldi 9y ago

muzz 9y ago

Likely due to state law, ie Prop 13

raldi 9y ago
Indeed.
gman83 9y ago
Good podcast about Prop 13 from Malcolm Gladwell: http://revisionisthistory.com/episodes/11-a-good-walk-spoiled http://revisionisthistory.com/episodes/11-a-good-walk-spoile...

stouset 9y ago

Presumably, this is also why they want to reverse the sale rather than buy it back from the new owners for — realistically — next to nothing. Change in ownership means reassessment for the purpose of property taxes. Even though the homes in this neighborhood have undoubtedly been bought and sold repeatedly, they formed a legal entity that's held the common area in perpetuity with the side benefit of never having to have this land's value reassessed and property taxes increased. Makes me wonder if you could perform legal gymnastics to have a home in SF owned by a trust or other legal entity, then sell ownership of that legal entity to avoid property taxes being increased during a future sale.

raldi 9y ago
Yep: "Nevertheless, buyers of commercial property have found a way to avoid this reassessment. Instead of buying the property, they buy the legal entity that owns the property. Under rules set by the Board of Equalization, a change in ownership of such an entity doesn't trigger a new assessment of its properties unless more than 50% of the entity is acquired by a single person or business." "[Michael] Dell agreed to buy the entity that owns the Fairmont Miramar for $200 million in 2006. But after the deal was struck, Dell rewrote the contract, bringing in his wife and two investment advisors as partners. Because none of them held more than a 49% interest in the entity that owned the hotel, the hotel kept its assessment from 1999" http://www.latimes.com/opinion/opinion-la/la-ol-michael-dell-proposition-13-change-20140514-story.html http://www.latimes.com/opinion/opinion-la/la-ol-michael-dell...